Oppenheimer believes that investors aren’t appreciating enough the growth opportunities to come for International Business Machines . The investment firm initiated the technology giant at an outperform rating and $360 price target, implying upside of 24% ahead. Analyst Param Singh pointed to IBM’s pivot to software. He expects IBM’s software portfolio to grow at a 10% compound annual growth rate over the next two years, citing the company’s strength in its automation segment and improving growth in Red Hat, its open-source software provider subsidiary. IBM YTD mountain IBM YTD chart “Our differentiated view is based on IBM’s continued successful pivot to a software-centric company, and expect revenue/margin trajectory higher than consensus,” the analyst said. “We believe investors are too conservative on IBM’s transition, with the stock still covered by multiple legacy IT hardware/services analysts.” Meanwhile, IBM’s consulting revenue inflected positive in the third quarter of 2025, reflecting a recovery within applications and business consulting. Singh expects consulting to grow at a compound annual growth rate in the low single digits going forward. “Organizations that had previously spent IT budgets to build-out their AI infrastructure, and are now looking to utilize that hardware with AI applications. IBM is still considered to have exceptional talent/engineering and should benefit from application development/ management,” the analyst wrote. The analyst also sees additional revenue from the creation and management of artificial intelligence applications. “We believe these drivers will result in strong expansion activity with existing customers, and drive continued gross (on higher software mix) and pre-tax margin expansion,” Singh added. “IBM should re-rate higher, in our view, and trade closer to the comparable average given solid growth in its software portfolio, inflection in consulting growth, and expanding gross and pre-tax margins.” Shares of IBM have rallied 32% this year.
